China - Economic Data & News 22 (Jul 24 - Dec 26)

[behappyalways]

China's GDP grew by 5% in the first quarter, but credit card issuance fell to a seven-year low.

陸首季GDP增5% 信用卡發卡量卻跌至七年最低｜方念華｜FOCUS全球新聞20260417 ‪@tvbsfocus‬

https://m.youtube.com/watch?v=paIoYxl8NxQ

[behappyalways]

Are Western big brands losing their appeal? Foreign companies are struggling with low customer loyalty in the Chinese market.

西方大牌不香了? 中國市場低忠誠度外資陷苦

https://m.youtube.com/watch?v=wj5OshYx6gU

[behappyalways]

Private Sector Struggles In Major Chinese Industrial Base As Export Orders Shrink: Local Businessmen
https://www.zerohedge.com/economics/pri ... rink-local

[winston]

China’s US$3 trillion of hidden bad debt prolongs economic pain

Chinese banks are also accelerating write-offs and transfers of bad assets

Most economists say the ratio of bad loans is significantly higher than the 1.5 per cent official rate.

One analyst at Absolute Strategy Research in London pegs it at about 10 per cent, which would mean a staggering US$3 trillion in loans that should be classified as past due are not. Others say it could be double that amount.

In March, China lowered its 2026 growth target to between 4.5 per cent and 5 per cent, its least ambitious goal since 1991.

Despite seemingly strong capital buffers and stable non-performing loan (NPL) ratios, officials have moved to bolster the nation’s six biggest banks with more than US$100 billion in fresh capital.

About 10 per cent of listed non-financial firms have failed to cover interest payments from their earnings before interest and tax for three consecutive years, according to Absolute Strategy Research. As a result, the NPL ratio is probably closer to 10 per cent than 1.5 per cent.

These so-called zombie firms accounted for 16 per cent of assets at non-financial companies in China in 2024, up from just 5 per cent in 2018. While the real estate sector has the highest rate, the manufacturing and services sectors are rising, too, the report found.

To counter the weak loan books and shore up the banks’ balance sheets, the government is injecting money into the lenders. China will issue a total of 300 billion yuan worth of special sovereign bonds this year to recapitalise banks, adding to a 500 billion yuan lifeline last year.

Source: Bloomberg

https://www.businesstimes.com.sg/compan ... nomic-pain

[winston]

Don’t use GDP to judge China’s strength – look at this instead

China continues to tout its 5% GDP growth figure, but the ICOR metric reveals just how badly the nation is wasting capital

by Daniel Swift

Incremental Capital Output Ratio, or ICOR, and it measures how much additional investment is required to produce one additional unit of economic output.

When an economy is healthy, the ratio stays low. When capital is wasted — when investment flows into projects that don’t pay off, when supply chases demand that doesn’t exist, when the excess is dumped on other countries to mitigate losses — the ratio rises. China’s ICOR is rising quickly.

South Korea and Taiwan ran ICORs of 3.2 and 2.7 , respectively , during their own high-growth decades.

Using more realistic GDP growth figures from the Rhodium Group, a US-based independent research provider, which estimates China’s 2025 growth in the 2.5–3% range, the implied ICOR is between 14 and 17.

The point is that even the most generous reading of Chinese economic data shows an economy that is rapidly becoming less productive with more subsidized credit.

Source: Asia Times

https://asiatimes.com/2026/05/dont-use- ... 340db87eb1